S.P TRAVELS AND LOGISTICS, CHENNAI V. ACIT NON CORPORATE CIRCLE-22, CHENNAI

ITA 1609/CHNY/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1550 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 23-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 144; 142(1); 143(2); 22

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1609/CHNY/2019 / ASSESSMENT YEAR: 2015-16 M/S. S.P. TRAVELS & LOGISTICS, NO. 4/22, PONNI APARTMENTS, VIDHUTALAI NAGAR, 7 TH STREET, SOUTH KOLATHUR, GROUND FLOOR, CHENNAI 600 129. [PAN:ABXFS1633D] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 22 CHENNAI 600 034. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI D. ANAND, ADVOCATE / RESPONDENT BY : SHRI SURESH PERIASAMY, JCIT / DATE OF HEARING : 14.12.2020 /DATE OF PRONOUNCEMENT : 15.02.2021 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 10, CHENNAI, DATED 30.01.2019 RELEVANT TO THE ASSESSMENT YEAR 2015-16. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED CONFIRMATION OF ESTIMATION OF INCOME AT 8% OF GROSS RECEIPTS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2015-16 ON 30.09.2015 DECLARING TOTAL INCOME OF I.T.A. NO. 1609/CHNY/19 2 .47,81,870/-. THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT] WAS ISSUED. THE NOTICE RETURNED UNSERVED. THEN NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED. THE SAID NOTICE ALSO RETURNED UNSERVED STATING THAT THE ASSESSEE LEFT THE LOCATION. THEREAFTER, NOTICE UNDER SECTION 142(1) R.W.S. 129 OF THE ACT WAS ISSUED WITH A DIRECTION TO PRODUCE THE DOCUMENTS, BUT THERE WAS NO RESPONSE FROM THE ASSESSEE. DESPITE VARIOUS NOTICES ISSUED, THERE WAS NO PROPER RESPONSE FROM THE ASSESSEE AND FINALLY, THE ASSESSEE WAS GIVEN PRE-ASSESSMENT NOTICE INTIMATING THE ASSESSEE FOR COMPLETING THE ASSESSMENT ON AN ESTIMATE BASIS AT AN INCOME OF .78,93,143/- @ 8% OF THE GROSS RECEIPTS OF .9,86,64,287/-. WITHOUT ANY SUPPORTING BILLS AND VOUCHERS, EXPENSES INCURRED BY THE ASSESSEE COULD NOT BE VERIFIED AND SINCE THE CORRECTNESS OF THE ACCOUNTS OF THE ASSESSEE COULD NOT BE VERIFIED, THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT UNDER SECTION 144 OF THE ACT AT THE TOTAL INCOME OF .78,93,143/- @ 8% OF THE .9,86,64,287/-. ON APPEAL, SINCE THE ASSESSEE COULD NOT RESPONDED/ REPRESENTED HIS CASE, THE LD. CIT(A) DISMISSED THE APPEAL. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT WITHOUT ADOPTING ANY REASONABLE BASIS, THE ASSESSING OFFICER SIMPLY ESTIMATED THE TOTAL INCOME OF THE ASSESSEE AT 8% OF THE GROSS RECEIPTS ARBITRARILY AND PRAYED FOR SUITABLE I.T.A. NO. 1609/CHNY/19 3 DIRECTIONS. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. ON PERUSAL OF THE ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT, WE FIND THAT THE ASSESSING OFFICER HAS CONCLUDED THE ASSESSMENT BY SIMPLY ESTIMATING THE CURRENT INCOME OF THE ASSESSEE WITHOUT ANY BASIS AT 8% OF GROSS RECEIPTS AS TOTAL INCOME ON THE GROUND THAT THE EXPENSES INCURRED BY THE ASSESSEE COULD NOT BE VERIFIED WITH ANY SUPPORTING BILLS AND VOUCHERS AND THEREBY INCOME OF THE ASSESSEE COULD NOT BE ARRIVED AT CORRECTLY, WHICH WAS ALSO CONFIRMED BY THE LD. CIT(A). WHEN THE ASSESSEE HAS NOT PROVIDED WITH ANY SUPPORTING BILLS AND VOUCHERS FOR VERIFICATION OF ITS EXPENSES, THE ASSESSING OFFICER SHOULD HAVE ESTIMATED THE INCOME OF THE ASSESSEE ON SOME REASONABLE BASIS FOR WHICH COMPARABLE CASE AND HISTORY OF THE ASSESSEE COULD BE TAKEN AS GUIDE. THE ESTIMATION OF INCOME AT 8% OF THE GROSS RECEIPTS WAS WITHOUT ANY BASIS AND MATERIALS ON RECORD. UNDER THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DIRECT THE ASSESSING OFFICER TO ESTIMATE THE TOTAL INCOME BY APPLYING AN AVERAGE RATE OF EARLIER THREE YEARS GROSS RECEIPTS AS INCOME AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I.T.A. NO. 1609/CHNY/19 4 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 15 TH FEBRUARY, 2021 IN CHENNAI. SD/ - SD/ - (G. MANJUNATHA) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 15.02.2021 VM/- /COPY TO: 1. /APPELLANT, 2. / RESPONDENT, 3. ( )/CIT(A), 4. /CIT, 5. /DR & 6. /GF.